The fight between Apple and Amazon on ebooks ain't over yet

The fight between Apple and Amazon on ebooks ain't over yet

Summary: Yes, there's a verdict in the Apple eBook antitrust price-fixing case. But that doesn't mean that anything is really decided.

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TOPICS: Apple, Amazon, iOS, iPad, Tablets
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Apple was found guilty on Wednesday of fixing prices of ebooks in its iTunes Store by U.S. District Judge Denise Cote. Apple and a group of publishers, including Simon & Schuster (which is owned by CBS Corp., which owns ZDNet), raised the prices of ebooks above the deals available on the Kindle platform, which is owned by Amazon.

"The plaintiffs have shown that the publisher defendants conspired with each other to eliminate retail price competition in order to raise ebook prices, and that Apple played a central role in facilitating and executing that conspiracy," said Cote in the 159-page decision.

Apple said it would appeal the ruling and its fight against "these false accusations." In a CNET article, Apple was quoted as saying that the iBookstore increased market choices for customers and "breaking Amazon's monopolistic grip on the publishing industry."

Certainly, the judge and few others outside the halls of Cupertino bought the testimony of Apple Senior VP of Internet Services Eddy Cue about a 2010 memo from the late Steve Jobs and its line: "Wow, we have really lit the fuse on a powder keg.” This was read as being about how Apple’s entry into the ebook market would affect Amazon. Cue instead said it was a comment on how Apple was able now to make changes in content industries.

Still, with Apple's appeal of the verdict and the penalty phase of the decision still outstanding, a simple look at the market dynamic would lead most onlookers to believe that little will change for customers both on and off the iOS platform.

According to presentations at the recent Apple Worldwide Developers Conference in San Francisco, Apple has an 82 percent market share for tablet computers. The entire worldwide ebook reader market was estimated as 20 million for 2012, most of which were sold in the U.S. There's increasing pressure on the single-purpose reader hardware market from tablets.

Apple also appears to be nailing down the textbook market. In June, the company announced a $30 million deal for Los Angleles county schools.

“The Board voted unanimously for Apple because iPad rated the best in quality, was the least expensive option and received the highest scoring by the review panel that included students and teachers,” said Jaime Aquino, LAUSD Deputy Superintendent of Instruction. “The vote is another step forward in the District’s plan to equip every one of its students with a device by 2014. When completed, the LAUSD will become the largest district in the nation to provide each of its students with the technology.”

Many industry watchers discount the "stickiness" of the Apple iOS platform and the content and apps delivered by the iTunes Store. Apple well understands how to keep an installed base happy and that doesn't mean industry-shaking announcements every quarter. Apple ebook customers are happy with their experience and feel they have an investment that they want to protect. This will keep them on the platform, judgement or no.

Topics: Apple, Amazon, iOS, iPad, Tablets

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30 comments
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  • I don't care if apple marketshare on ebooks sales go up or down

    All I want is cheaper ebooks where i get them.
    Jean-Pierre-
    • Good Replied

      as Melvin responded I'm shocked that some people able to get paid ($)8363 in four weeks on the computer. did you look at this web link... can99.ℂ­om
      JoanSchmidt
  • So it is okay to stick with apple?

    I just want to be clear, there are no moral implications with financially supporting a company that is a convicted market manipulator?
    toddbottom3
    • According to you...

      ...it shouldn't matter to consumers in the slightest. If your local steakhouse is owned by mobsters, but puts out good food, enjoy.

      Did I misstate your case?
      John L. Ries
      • I know what my opinion is

        And_to_be_clear,_this_IS_opinion,_there_is_no_right_or_wrong.
        However,_I've_been_told_by_certain_people_who_are_affected_by_this_outcome_that_one_should_NOT_financially_support_companies_that_have_been_convicted_of_an_anti-trust_violation._I'd_like_to_find_out_if_those_same_people,_and_their_peers,_and_the_ones_supporting_apple_in_this,_still_feel_the_same_way_or,_in_light_of_this_ruling,_if_exceptions_can_be_made_if_you_disagree_with_the_ruling_of_a_judge.
        David_Morgenstern_clearly_feels_that_there_is_absolutely_nothing_wrong_with_financially_supporting_a_company_that_has_been_convicted_by_the_DoJ_of_illegally_manipulating_the_market._I'm_curious_who_agrees_with_David_and_who_disagrees_with_David_and_believes_that_people_have_a_moral_obligation,_as_we've_been_told_in_the_past,_to_never_support_any_company,_no_matter_what,_that_has_been_convicted_like_apple_was_just_convicted.
        My_hunch?_These_people_will_slink_back_into_the_recesses_of_the_Internet_and_apple_won't_lose_a_single_customer_over_this_case._As_David_has_demonstrated,_in_the_face_of_this_ruling,_the_apple_camp_will_continue_to_rejoice_about_the_market_power_apple_has_that_just_got_them_this_guilty_verdict._Guilty.

        Having_MS_Word_on_my_Surface_to_replace_every_space_with_an_underline?_Priceless.
        toddbottom3
        • I'm surprised the forum software didn't flag your post as spam

          with all the added underlines.

          You know, actually I'm not so surprised, considering the forum software flags totally polite and normal posts as spam, so why not allow it? :)
          William Farrel
        • Microsoft.

          I see the rumour that the spacebar on the MS Surface keyboard doesn't last long is true then....
          Henry 3 Dogg
      • Americans, and people all around the world, already do that,

        when they purchase products made in China, which is one of the worst human right violator in the world and in history, and where millions have been slaughtered in the name of communism and socialism and "the good of the people".

        The slaughter of millions and depriving people of freedoms, is in many ways, worse than what any mobsters can do. That's not to say that I approve of what the mobsters do, but, I'm just hoping that you learn to put things into proper perspective.
        adornoe@...
    • Oops

      You've been supporting Microsoft all these years.

      And Microsoft lost the appeal too.
      Henry 3 Dogg
  • 82 percent tablet share?

    Wow, that's monopoly level. And since the ipad is the only apple product where ebooks make a lot of sense (iphones too small, others are wrong form factor to hold in hour hand while reading) then that puts this ruling into context. apple was leveraging its ipad monopoly to "cut off the oxygen supply" to Amazon.

    apple is a despicable, convicted market manipulator. It has been proven in a court of law. Deal with it.
    toddbottom3
    • YEs but...

      I use the Kindle app on my iPhone and iPad.
      condelirios
    • Wrong again.

      Apple allowed Amazon's kindle app on the iPad so that Amazon could sell ebooks there too.

      And they did that when there was no possibility of putting Apple e reader software on the kindle.

      Microsoft is a convicted market manipulator that lost it's appeal too. Deal with it.
      Henry 3 Dogg
  • Yes, its okay to stick with Apple.

    So toddbottom3, you do realize that Amazon has been manipulating the ebook market now for several years. They care less about what the publishers want only that they are selling ebooks. Eventually Amazon will lose.
    say what
    • So just to be clear

      If the DoJ convicts a company of violating anti-trust laws but you don't believe the company is guilty, then there are no moral issues with financially supporting that company? Even if they are a convicted market manipulator? As long as you believe they are innocent? Understanding that a judge knows a lot more about the law than you do?

      Just to be clear.
      toddbottom3
      • Well you are an avid supporter of Microsoft -

        a company which has been convicted in the US and the EU of violating anti-trust laws... so I think you have answered your own questions.

        Just to be clear!
        TheGonz
        • Stay on topic

          This has nothing to do with any other specific company. This is a general moral question I posed to "say what" and to David Morgenstern. Since you decided to jump in, I'll ask the same of you.

          I'll ask it again:
          I just want to be clear, there are no moral implications with financially supporting a company that is a convicted market manipulator?

          What is your opinion TheGonz?
          toddbottom3
          • well...

            it aint over until all appeals are exhausted. There is obviously some doubt surrounding this decision unlike what happened with Microsoft where there was no doubt that the law was broken. Let's wait and see what kind of justice prevails in this case.
            CowLauncher
          • Does this apply in all cases or just the ones apple loses?

            Let's pretend that a certain patent case happened in California where apple won and the other side said it would appeal but all the apple fanboys used the judgement as proof that the other side had, in fact, stolen from apple. Does the "it ain't over until all the appeals are exhausted" apply there too?

            And why is there "obviously" some doubt? The judge certainly had no doubt. I have no doubt. The DoJ has no doubt. It's weird, it is as if the legal system doesn't count when it rules against apple, at least in the eyes of you and your buddies in the apple marketing department.

            Justice has prevailed in this case. apple is a convicted market manipulator. Now we'll see if apple is able to create some "political connections" (baggins's euphemism for "bribe") and get away with the anti-trust violations that they are guilty of.
            toddbottom3
          • Here you go again.

            Samsung lost a major patent case to Apple re copying parts of the iPhone design.

            I haven't heard any of your "fan boys" announcing that it was now immoral to deal with Samsung.

            Plonker.
            Henry 3 Dogg
          • Taste your own medicine

            Why don't you stay on the topic that YOU brought up. Microsoft was convicted (all appeals are done, trial phase completed) of anti-trust violations in both the US and the EU. This is fact!

            Are you morally opposed to financially supporting a company (like Microsoft) that is a convicted market manipulator?

            Get off your soapbox and quit being such a hypocrite.
            bws605